Debtors Rights

False Statements and Fraudulent Debt Collection Practices

A federal statute known as the Fair Debt Collection Practices Act (often
called the "FDCPA") gives you specific legal rights to sue debt collectors
who unlawfully threaten, berate, intimidate or harass you; call you during
odd hours, make false representations about the the debt or their
intentions, or otherwise act in ways proscribed by the act (and their are
many). False statements may include threats to:

Attach your wages when unlawful or not intended.

This includes threats to take more wages than is permitted by the federal
limitation (wage attachment for a credit card debt, a non-student loan or
for an obligation that is not support is generally illegal in many States,
however, now that law has been expanded to rent and lease damages in some
cases-you should check the statute to be sure);

Contact your employer about the debt;

Call you "everyday until the debt is paid;"

Sell the debt to another company for the purposes of continuing collection
on a time-barred debt;

Contact neighbors about the debt;

Contact the Immigration and Naturalization Service about your alien status;

Threaten imprisonment or criminal punishment;

Report a financed vehicle as "stolen" because you missed one or more vehicle
payments;

File or threaten to file criminal bad check charges on a post dated check
that the collector solicited from you;

Immediate eviction (by an agent for a landlord); lockout, or seizure of
personal property where such relief is limited by state law;

A disguised threat of suit e.g. A collector requested "settlement prior to
possible legal action" where the collection agency had no authority to sue
or to retain counsel was held by a Federal District Court in Connecticut to
be deceptive and violative of the FDCPA.

Here's one you may not have anticipated: A threat implying that the
collection agency has multiple employees or investigators working to collect
the debt, where only one or two people work for the agency.

Threats to collect or sue for "collection costs," "attorney's fees," (see
also below) interest not pre-agreed to in excess of that allowed by statute,
"fines," or any other fee in excess of the actual amount due, unless the
original agreement provides for the amount the collector threatens to
collect. For instance, the collector cannot threaten to add attorney's fees
or his fees where the agreement you signed does not specifically provide for
them. Let's say you went to the dentist and just signed consent form and a
medical history. You agreed to pay for all charges if your insurance did
not. Nothing is mentioned about anything else. The collector cannot add any
other fees or even and especially, his costs, late fees or other charges.

Threats adding "collection costs, attorney's fees" and similar additional
charges have also been held to be deceptive and misleading, because they do
not state exactly what debt is being sought.

Sue or bring any kind of legal action where the threat is not followed
through (i.e. a scare tactic), or any number or other threats designed to
demoralize, humiliate, degrade; embarrass or intimidate a debtor into
payment.

Any threat where the collector says he is legal counsel or an
attorney/lawyer when he is not;

The threat or attempt to mislead a debtor that a claim will be transferred
to an attorney or separate department of a collector (e.g. "This will be
transferred to our legal department for further action"). Letters
misrepresenting that the account has been transferred to an attorney may
include an attorney's letterhead with threats of legal action. Have you ever
received a letter from a lawyer who purportedly collects for a major
creditor? Has the lawyer been out-of-state? Has the lawyer threatened to sue
if payment was not made?

Other Little-Known Tactics That Are Illegal:

It is unlawful under the FDCPA to threaten suit if no such action is
intended. The attorney cannot sue you in a state that is not your home
state, under the FDCPA. Therefore, the threat is an empty one. Empty threats
are punishable under the FDCPA!

It is unlawful for such a letter to be sent unless the lawyer reviews the
letter? Do you believe that when thousands of letters issued the lawyer
reviews each one? Where the correspondence is not reviewed by counsel, the
correspondence violates the FDCPA.

Look at the letters you receive from lawyers. Were they signed by hand? If
not, perhaps they were not reviewed by a lawyer. You may have a case under
the FDCPA.

The collector's threat to "make this go legal" or to "turn the matter over
to the legal department" may violate the FDCPA where the collector has no
legal department. Do you think that the collector may be a collection
operation only? If so, perhaps they have no legal department, i.e., the
legal aspect is handled outside of the company. In this scenario is another
violation of the FDCPA.

It is also a violation to send a letter stating that the collector will
"recommend litigation" or "advise the creditor to sue." Some of such
correspondence has been found to violate the FDCPA because it, in essence
purports to give legal advice to the creditor. The collector is not
permitted to give legal advice, unless, of course, if the collector is an
attorney himself.

The Least Sophisticated Consumer Standard:

Did you also know that it does not matter if you believed the threats or
that a person of your intelligence would not have believed the threats (i.e.
the collector threatens to have you arrested for not paying the creditor.
You as an intelligent consumer believe the threat is ridiculous since the
U.S. Constitution prohibits such actions). The FDCPA's standard is the
"least sophisticated consumer standard." That is, would anyone believe the
threat.

This would be enough to sustain the standard and your burden of proof if the
court believes that the threat occurred.

Supporting Case Law

It is also unlawful to sue a consumer in a jurisdiction that is not the
jurisdiction where the consumer resides or the one in which the contract was
made. Example: PA R&D Enterprises, Inc. and their sister corporation
Judgment Busters, Inc. (pretty despicable sounding name, huh?) seems to be
in the business of purchasing uncollectible judgments. In one case, PA R&D
purchased a judgment for rent against a consumer in Delaware County, PA. PA
R&D exported the judgment to Luzerne County, some 115 miles away from the
consumer. PA R&D then added $1,000 to the judgment as "attorney's fees."
There was a slight problem: Neither PA R&D nor its officer was an attorney.
In effect, they gave themselves a pay raise, just like Congress! PA R&D
decided the judgment should be higher than it was, so it just put it in the
Luzerne County judgment! Wow, neat trick PA R&D! PA R&D also took the
judgment to a remote location which also violated the
FDCPA §1692i PA R&D
and executed on the consumer's wages for the greater amount. The employer
balked (luckily), but the matter became moot when the consumer left the
employment of the employer. This case was recently filed as an adversary
proceeding (a civil action) before the Bankruptcy Court for the Eastern
District of Pennsylvania. The matter is pending and awaiting an Answer from
the defendants, which include PA R&D, Judgment Busters and certain officers
of the corporations. The complaint alleges violations of the FDCPA,
Pennsylvania Fair Trade Practices Act, and common law fraud.

The courts have decided thousands of cases on the subject and it is
impossible to list all prohibited types of threats. Suffice it to say that
if it seems wrong, it is worth speaking to a consumer protection lawyer in
your area.

We have seen may instances of this type of conduct and can help you recover
money. There are literally dozens of ways in which a debt collector can
break the law. Each time a collector breaks the law, you may be entitled to
damages in an amount commensurate with the gravity of the violation
(however, most courts limit the liquidated damages to one instance in each
case-see your lawyer about this). Some collectors have gone so far as to
threaten arrest, jail, or harm to loved ones, including informing friends
and work associates of the debtor's financial embarrassment. Any threat to
do something that is not allowed by law is grievous and actionable (you can
bring suit).

The "Mini-Miranda Warning"

Each time a debt collector contacts you, he must give you what is known as a
"Mini-Miranda Warning" This warning received that name because it is
reminiscent of the warnings that police should give you if you are arrested,
however, "Mini-Miranda Warnings" have nothing to do with criminal law. A
"Mini-Miranda Warning must contain the following words (or words imparting
this meaning):

"Hello, I am _________(name of collector). I am (or this office is) a debt
collector representing____________(creditor). Information obtained during
the course of this call will be used for the purpose of collecting the
debt."

If the creditor has not been advising you as above, you may have a right to
sue.

Letters you receive in the mail from collectors also must contain similar
warnings such as:

"This is an attempt to collect a debt. Any information obtained will be used
for that purpose. Unless within 30 days of your receipt of this notice, you
notify us that you dispute the validity of this debt, it will be assumed to
be correct. If you notify this office within thirty days that you dispute
the validity of the debt, we will obtain verification of the debt or a copy
of the judgment. If you request it within 30 days, we will provide you with
the name and address of the original creditor (if different from the current
creditor)."

If the letter does not state the above, or words similar or close to the
above, you may also have a right of action. Furthermore, did you know that
no bill collector or creditor has the right to contact any third person
about your debt, except to get information solely to locate you? This means
that if a bill collector or a creditor tells any except you that you owe
them money, they too can be sued.

Debt Collector's Calls at Work

The FDCPA states:

“Without the prior consent of the consumer given directly to the debt
collector or the express permission of a court of competent jurisdiction, a
debt collector may not communicate with a consumer in connection with the
collection of any debt"

Simply put, anyone can stop collectors from harassing them at work by
putting the collector on notice that the employer of the consumer does not
permit him or her to receive the calls.

Do you think your employer allows you to be harassed at work?

Is this why you are paid? Probably not! Tell the debt collector this and
confirm it in a letter! Then make notes as to each time the collector
violates this warning. Bring your notes to your attorney and have him use it
against the collector in court.

Your Rights to Stop Harassment by the Debt Collectors

Insofar as collectors are concerned, there is no reason why:

You need to discuss anything with a collector if you know you cannot pay;

You have to answer a phone for a collector (this works with caller ID).

You have to speak with the collector if you do answer.

You have to answer any questions at all posed by the collector.

You have to say "good-bye" before you hang up.

You have to be truthful about your personal and financial affairs (you do
not have to disclose private information about assets or income).

Important: There is no reason you need to acknowledge that you owe the
money! This is very important if the debt is old. By acknowledging the debt,
you may actually extend the time the creditor can sue on it.

All states have statutes of limitations on debt collecting. A few states are
more than six years. Many are less.

You can extend this limitation by acknowledge the debt or even by making a
partial payment!

In fact, you do not even need a lawyer to stop collectors from calling you
(although one is very helpful)! All you need to do is to mail the creditor
or collector a "cease communication" letter. This request can be made any
time, but it must be made in writing. It is always preferable to send the
request by certified mail and keep a copy. This copy will be proof of your
request should you need to sue the creditor. Once the collector receives
your letter, they can only contact you to inform you of any action it
intends to take or to tell you that it is terminating its efforts to collect
the debt. This letter is enough you legal stop further contact or dunning
letters.

Validation of debts and Sample Validation Request Form

The FDCPA provides that debts that are pursued by a debt collector be
validated and
[15 USC 1692g]. Validation of the debt is every debtor's
right. You don't need a reason. The fact that you request validation is
quite enough to evoke to protection of the FDCPA. The Act provides that
(paraphrasing, within five days after the initial communication with a
consumer in connection with the collection of any debt, a debt collector
shall (unless already provided in the initial contact), send the consumer a
written notice containing -

(1) the amount of the debt;

(2) the name of the creditor to whom the debt is owed;

(3) a statement that unless the consumer, within thirty days after receipt
of the notice, disputes the validity of the debt, or any portion thereof,
the debt will be assumed to be valid by the debt collector; and

(4) a statement that if the consumer notifies the debt collector in writing
within the thirty-day period that the debt is disputed, the debt collector
will obtain verification of the debt.

This means that if you write a debt validation request, a sample of which is
available upon request, all communications and enforcement must stop until
the debt is validated. Yes, that means lawsuits also.

What happens if the collector refuses to validate the debt?

You should only be so lucky. If after a validation request under the FDCPA,
the creditor refuses to cooperate, then the creditor may not legally collect
the debt. If the collector does, then the law is violated and a suit for
damages may be brought.

Such a suit was brought in federal court in New Jersey against MRS
Associates, debt collectors for a company going by the name of Lake Cook
Partners. Lake Cook engages in, what is known in the business as, "bottom
feeding." Bottom feeding is a term used to mean the acquisition of "dead" or
written off debts. Lake Cook purchases the debts from credit card companies
(and perhaps other companies) for pennies on the dollar. Lake Cook then uses
MRS Associates to make a debtor's life a living hell.

What if the debt collector ignores the request and collects the debt anyway?

That happened with MRS Associates. MRS was requested to validate a debt
alleged owed by a husband of a client who received a bankruptcy discharge.
The husband claimed that his wife had applied for the card, not him. Not
that it would matter anyway; the husband was entitled to validation under
the law. If validation was not forthcoming, too bad for the collector. MRS
believed that the burden was on the debtor since the card had been open for
"21 years."

Note: MRS stated that the debtor had the account for 21 years, the fact that
it "is highly improbable" that MRS would have been able to get a copy of a
document that the debtor signed 20 years ago did not excuse MRS from
obtaining what validation that they could get. In this case, MRS did not
even attempt to get anything. Perhaps MRS did not want to be bothered to
comply with federal law. I guess it's easier that way.

Outcome: The foregoing message was in large part the reason that MRS settled
with the debtor for $4,500. Needless to say, the debt was never validated.
The debtor would have been forced to pay over $10, 000. You can see a copy
of the complaint here.

Lake Cook (continued)

Not even two weeks after the $4,500 payment, the same client was contacted
by Creditor's Interchange, Inc., ("CI") a debt collection outfit in Buffalo,
NY. The collector calls this office and this is what transpires: A
collection agent by the name of Richard Kerns who says he works for CI
calls.

We answer the phone saying "law offices" as is called for by our business
procedure.

Your attorney may use medical (psychiatric/psychological) testimony, but
does not need to. Damages for emotional distress can be claimed even without
medical support. This does not mean they will always be believed, of course.
It is up to the judge or jury to decide if the plaintiff is telling the
truth. Anyway, the plaintiff in the FDCPA lawsuit starts with a tremendous
advantage.

Free Cease Communication Letter

Still are not sure what to do? You're in luck. Just
go here (this form will
be generated in a new browser window, so come back here when you are done)
edit with personal and the relevant and print out the form, sign it and mail
it to the debt collector. Be sure to keep a copy and mail your form
certified mail.

Sample FDCPA Cases, Complaint Forms and Their Results

The law states that FDCPA cases can be brought in any court of competent
jurisdiction. This means that you can bring actions against harassing
collectors, and under some state laws, creditors as well, in small claims
court even without an attorney. You do not need to use a small claims court;
Federal District Courts are the natural "home" for this type of litigation.
It is not recommended that you start an FDCPA lawsuit without an attorney
because it takes some fluency in the act to know what to ask of the court.

Many magistrates or small claims court judges are unfamiliar with the act.
If you want to go ahead despite this warning, you can see how a typical
action was brought in a District Justice Court in Pennsylvania. "DJ" Courts
are generally small claims in PA, having jurisdiction up to $8,000. This
case was brought against a collector in New York for violations of the
FDCPA's verification and cease communication provisions. A copy of the
complaint can be inspected
here in PDF (Adobe) format. The case settled for
a gross sum of $975.00 which included counsel fees of an unspecified amount.

If you are in the state of Pennsylvania and need a similar (blank) form (this can be used in any
type of civil action), go
here. This page has filing instructions as well.
Be careful though. Be aware that if the creditor has a claim against you on
a debt, the creditor may counter sue you on that debt. This means that it
may be better to bring this action as a counterclaim and not as an
independent action if you owe more than the claim!

In most cases, it is better to bring the case in U.S. District Court. This
office recently sued a national law firm in the District Court in
Philadelphia. The name of the firm is withheld out of courtesy, since the
case was settled within four days after suing; at least the firm had the
integrity to admit the error and correct it. This firm is engaged in debt
collection practices on a national scale. They are based in Long Island, NY
and has offices in Philadelphia and elsewhere. Their website claims they
have "national ability." In reality, this "national ability" previously led
to a previous class action against this firm (not brought by this office)
which settled for more than $453,000! (E.D. Pa. 2000). This firm, among
other things, threatened have an agent of theirs come "come to [the
plaintiff's] house" and inventory all of plaintiff's personal property for
sale! Jeez! What power! What abuse! Of course, this made plaintiff's wife
panic. It also did not sit to well with the plaintiff's nerves, either.

Case outcome: The defendant paid plaintiff $1,500, plus $2,000 in attorney's
fees (the best part) and also paid off those nasty guys at Ford Motor
Credit. Value of settlement all together? About $7,500 +/-. Not bad for a
few phone calls and a letter.

Auto Repossession Notes:

Note #1 When a debt collector (actually this is a repo outfit) is attempting
to repossess a vehicle.

The collector or creditor cannot, "issue a warrant to the sheriff for your
arrest."

The collector cannot employ criminal process to collect a civil debt (owing
money and refusing to pay it is not a crime.

The collector cannot threaten to do something he knows he cannot legally do
(see above).

The collector cannot leave threats on an answering machine where others can
hear it.

The collector may not imply that there is some legal duty that the debtor
must call back (..."must hear from you"). There is no legal duty to return a
collectors phone calls.

The collector may not threaten something he does not intend. The collector
does not intend to "make this thing go legal," he only intend to scare the
debtor into surrendering his car. The collector has probably not even
consulted counsel; his job is to collect the vehicle only.

Again, the collector cannot threaten to harass the debtor every day ("I'm
never going away..."). The collector intends that the debtor fear that the
collector will come to his home every day (the collector says this, in so
many words). "I will be at your door every evening...." You wouldn't put up
with this nonsense even from a relative; why should you stand for it from a
goon from a repo outfit? The last time I checked, people do not keep motor
vehicles in their living rooms. There is no reason for this man to threaten
that he will come to the debtor's door "every evening." The creditor / debt
collector has no right to harass the debtor "every evening." Further, a
threat to behave like this is itself a form of harassment and is actionable.

"You must call here...." As stated above, the creditor or collector may not
infer that the debtor has a duty to call back.

"This is not a threat..." What is it then? This guy knows he is not
supposed to be doing this.

Note #2 A Chase Bank collector threatened "fraud" because the debtor had
been in bankruptcy, discharged the debt therein, and then had the
unmitigated audacity to have been born in Portugal! *gasp!* The collector
tried to get at the debtor by saying that she had left her mother "holding
the bag." Of course, this was a lie. There was no intent to prosecute for a
fraud because there was not debt.

Lawsuits under FDCPA allow for counsel fees, damages, and costs. Each FDCPA
violation can net you up to $1,000 plus attorney's fees and actual damages.
Repeated conduct will usually receive greater damages and is less likely to
a succumb to a defense of "innocent mistake." You should be diligent in
protecting your rights. The statute of limitations for bring most federal
actions of this nature is only one year unless used as a defense to an
action brought against you. Therefore, you should protect your rights before
they become unenforceable.

Note #3 From Chase Bank. This woman sounds like she has the emotion of a
collection terminator. "I'm tired of playing games with you (so I guess she
is starting one of her own here). I'll call every neighbor on your block to
make sure you're in the right place." Wow! How intimidating! How illegal.
Collectors are allowed to obtain
locator information. Once the collector
knows where you are, which obviously Chase did, after all she was calling
her phone, any further calls to neighbors are no longer locator information.
They are just unlawful communications with third parties intending to
humiliate and embarrass the debtor, which it did. Furthermore, this debtor
had just received a discharge in bankruptcy! Not only are these tactics
barred by state law, and the FDCPA, they were also barred by bankruptcy law.
The caller then refers to "attorney fees, " which also is misleading and
unlawful unless the actual amount if stated. The only help you will ever get
from a debt collector, is that collector helping itself to your bank
accounts or motor vehicle.

More on creditor/debt collector protection:

Certain states, such as Pennsylvania, may have laws protecting consumers
from harassment even though the FDCPA may not be applicable. These laws may
even expand (e.g. Pennsylvania) on the FDCPA, broadening its scope and
applicability. To see if your state has such a law, you should consult with
a local attorney of see if you can find the information by researching your
State laws.

This information is presented to you by the Bank Fraud Victim Center. Our
mission is to educate homeowners about predatory lending practices, bank
fraud and the legal options available to them.

Our mission is to educate homeowners about predatory lending practices and bank fraud and
the legal options available to them. We believe that if you don't know your rights, you don’t know your options.

We are not a mortgage elimination company. We help homeowners who are victims of predatory lending and bank fraud.

We are the leaders in document auditing and predatory lending litigation and defense. And an authority on the subject of predatory lending practices, foreclosure defense, consumer protection and debtor’s rights.

http://mortgage-home-loan-bank-fraud.com
is here to educate consumers and to help victims recover their
losses and keep their homes. If you are a victim of bank fraud or predatory
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We believe that if you don't know your rights, you don’t know your
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